13 investing to grow how nielsen can help clients maximize return on their investments german gutierrez nielsen

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

Investing to Grow:

How Nielsen can Help Clients Maximize Return

on their Investments

September 9, 2009

August 27, 2009 Confidential & Proprietary

Copyright © 2009 The Nielsen Company

Presentation Name or

Confidentiality StatusPage 2

We live in a fragmented marketing world…

Multiple Screens: Internet, Mobile

Numerous TV Channels: including Digital TV

More ways to reach & target consumer!!

Manufacturers are working harder than ever to influence

consumer choice, and reach them in multiple ways…

Questions often asked in this context are:

•How do I stretch my budget to maximize returns?

•Given the new media reality, does traditional advertising still work?

•Should I continue to invest in media, or focus more on promotions?

•Does Digital media work? Should I replace traditional media for Digital?





Clients utilize Nielsen’s Marketing ROI Solutions Framework to grow profitably while addressing marketing fragmentation.

Measure the impact & ROI

of marketing spending

through Marketing Mix

Models & Analysis

Evaluate impact

compared to norms

and maximum

potential

Recommend

improved execution &

investment

strategy to grow.

Implement strategy.

Track execution and

impact of new marketing

plan





Nielsen Marketing ROI Solutions encompass the store, the market and the consumer.

Measure store-level marketing

response by using store-level

data

Integrate market-level trends &

differences

Understand consumer-level

response to marketing





Model measurements are used in a holistic framework to improve ROI.

Category Dynamics

Portfolio Management Rules

CompetitiveScenario

BrandObjectives

Marketing Mix Principles:Based on measurement & norms

Brand objectives should be considered. Example: small or new brands with the potential to be large brands require large investment but may have low ROIs initially.

Consider competitive dynamics (share of voice, level of category promotion, need to retain shelf space) when setting budgets.

Take into account the role of the category : is the category stagnant or growing? Is there down-shifting in the category? Is it impacted by the economy?

Build a Portfolio Management discipline by understanding how the investment of one business impacts the portfolio investment.

What works best? What do we know from norms? Note that differences in the size of the business, purchase frequency, penetration, and brand share can drive ROI differences.





From Total ROI to Consumer Insights: The Nielsen

Advantage





Consumers respond differentially to marketing: Nielsen models measure this difference.• Besides “national” ROI metrics, Nielsen also provides “consumer” ROIs

• Consumer groups based on AMAI survey results

BehaviorScape Framework

Social-Economic Level

BehaviorStage A/B C D+ D/E

New Family

FHHs <40 and Oldest Child <6 0.4% 3.0% 3.1% 5.2%

Young Family

FHHs <40 and Oldest Child 6-11 0.6% 3.8% 4.3% 6.3%

Family with Teens

FHHs <40 and Oldest Child 12+ 0.6% 4.1% 4.5% 6.3%

Established Family

FHHs 40-49 with Any Kids 1.1.% 5.6% 5.4% 5.8%

Mature Family

FHHs 50+ with Any Kids 0.7% 3.0% 4.0% 4.3%

Young Couple

FHHs <45 No Kids 0.4% 2.2% 2.4% 2.5%

Mature Couple

FHHs 45-59 No Kids 0.9% 3.4% 3.9% 3.0%

Senior Couple

FHHs 60+ No Kids 0.8% 2.4% 3.5% 2.6%

Total 5.5% 27.4% 31.0% 36.0%

• A/B Educated

professionals in

modern homes.

Family Income

+$82,000 pesos

• C Educated mid level

business people,

teachers, technicians.

$11,000 to $81,000

pesos

• D+ Less educated

workers, often in

informal commerce.

$6,000 to $10,000

pesos.

• D/E Laborers and

itinerant workers.

Income less than

$6,000 pesos





Example: Advertising Response by Mexican Lifestyle Segments

1) Measure the “Average Household” ROI = $1.05

2) Quantify differences in ROI using consumer

demographics data

Television Advertising

Response/ROI Summary

Consumption

Index

Response

Index

ROI

Index

TV Advertising ROI

Potential

Lifestyle A/B 115 100 115 $1.21

Lifestyle C 111 83 91 $0.96

Lifestyle D+ 104 52 54 $0.57

Lifestyle D/E 79 148 117 $1.23

Average Household 100 100 100 $1.05

Lifestyle D/E 79 148 117 $1.23

Highest ROI potential for this brand’s TV:

Lifestyle D/E ROI = $1.23 (compared to $1.05 average)





$1.21

$0.93

Lifestyle C Lifestyle A/B

Targeting more responsive consumer segments can increase ROI

Action: Target Lifestyle C Consumers Through Media

TV Shows Online Ads Magazines

Result: Increase in Total Media ROI and Response

What are the media consumption habits of consumers in Lifestyle C?





Balancing the Short-Term & Long-Term: What We Know from our Research

• Media has a measurable impact on brand penetration both in the current year and the subsequent one.

• Media prevents churn and increases trial, thus leading to true buyer gains (positive longer term effects)– Media has both “re-distribution” and “expansion” benefits.– Going dark on media increases churn and decreases trial.

• Promotion does not impact brand penetration in the longer term.

• Promotions cause both churn and trial, in effect losing buyers on one hand while gaining buyers on the other – Promotions therefore tend to increase price elasticity

• Category actions matter a lot – it’s your share of activities rather than how much you do... – Category promotion rates have more influence on trial &

churn than a brand’s own rates

Impact of Media on

Brand Penetration*

Year One Year Two

Inc

rem

en

tal P

en

etr

ati

on

* Based on US FMCG Study





Argentina Case Study: The Long-Term Effect of Marketing in Recession

2002 2003 2004 2005 2006

2002 Argentina Background:

• Economic instability, high unemployment•More rationalized purchases• Brand Switching, looking for price-quality benefit•Increased Price Sensitivity•Once the economic stability began, the consumers slowly began to buy again the brands they used to purchase before the crisis

A large FMCG brand continued to spend on media during the recession

While returns were low during the recession, they increased dramatically during the economic recovery, giving the brand a

competitive advantage!!

Media ROI Trends





Increasing Consumer Touch-points: Does Digital Media Work?

130

100

Digital TV

Digital ROI indexed to TV *

* Based on US and EU FMCG Studies

Digital ROI is measured to be 30% higher than TV ROI in FMCG

What drives effectiveness?•Content / Creative•Placement / Website

What drives high ROI?•Effectiveness / Response•Lower cost

What tactics work best?•Email, Paid Search, Broadband advertising•Neither reach nor frequency guarantee success•High click-through does not guarantee high ROI





Top 5 Things to Remember for your Marketing Budget

1. All consumers not equal in response – understand and target your most

responsive consumers.

2. Brand communication investment is crucial to maintain or increase your user

franchise – promotional activities alone will not achieve this.

3. As the traditional media market fragments, digital technology offers new and

innovative ways to communicate with your consumers in an ever more targeted

way. TV generally dominates as a volume driver, especially for big brands.

4. Digital works best when synergised with other brand activities and is well

targeted – it should be part of a holistic campaign.

5. Make your investments work as hard as possible through maximising both halo

and synergies.





Realizing Improvements in Marketing ROI: Nielsen Process

Bringing together our experience in…..

- 30+ Countries

- 100+ Brands

- 10+ Years





Customized

Models

Models “fit to

purpose”

Right

specification

Right trade-off

between

speed &

flexibility

Expert Analysis

&

Interpretation

Senior Mix

expertise

Integrate

client in

interpretation

Integrate other

research or

data available

Continuous

Application &

Learning

Marketing Mix

a process, not

an event

“Test & Learn”

What-if

scenarios

Meta-

learnings

Nielsen works with clients to create a best-in-class Marketing ROI program.

Right

Program Set

Up

Multi-

functional

participation &

buy-In from all

levels of the

organization

Client

leadership as

sponsors

BIC Marketing

Mix Program

Improvement

in marketing

ROI

Integrated

ROI-based

planning &

decision

making

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

Thank You!!

Questions?

Business

13 investing to grow how nielsen can help clients maximize return on their investments german gutierrez nielsen